Hillshire Brands has announced that it has agreed terms with Pinnacle Foods Inc through which Hillshire Brands will buy all remaining shares of Pinnacle Foods in a cash and stock deal.
Under the terms of the agreed deal, each Pinnacle Food common stock share will be traded for $18.00 USD in cash and 0.50 shares of Hillshire Brands common stock. The total value of the deal will be around $6.6 bn USD, which includes Pinnacle Foods unpaid debt, which reflects an adjusted EBITDA multiple of 9.6x.
“The combination of Hillshire Brands and Pinnacle Foods brings together two highly complementary organizations with strong brands, skilled employees and lean cost structures,” said Sean Connolly, president and chief executive officer of Hillshire Brands. “The acquisition creates a leading branded food company with enhanced scale, reach, and capabilities while providing margin expansion and strong EPS accretion. The new Hillshire Brands will have a strengthened position in frozen foods, new opportunities in the center store for our brands and in refrigerated for Pinnacle Foods’ brands. We believe our increased scale combined with a more diversified portfolio will deliver strong, consistent cash flows. This will enable us to continue to invest in our brands, enhance our portfolio, pursue value accretive M&A and deliver significant long-term value to our shareholders.”
Source: Foodbev / Hillshire Brands